Private Mortgage Investing.
Access real estate-secured private mortgage investments across Ontario – selected deal-by-deal and underwritten with a focus on capital preservation.
The private mortgage market.
In 2012, the Office of the Superintendent of Financial Institutions (OSFI) introduced its Residential Mortgage Underwriting Practices and Procedures Guideline (Guideline B-20), establishing stricter underwriting expectations for federally regulated mortgage lenders. Mortgage qualification places significant emphasis on income verification, debt-service ratios and overall borrower risk.
These requirements have contributed to a financing gap for homeowners and real estate investors who may have substantial equity or otherwise strong profiles but fall outside conventional lending criteria.
This has supported the growth of Ontario’s private mortgage market, where greater emphasis can be placed on the underlying real estate asset and a more practical underwriting approach.
For investors seeking an alternative to pooled structures such as Mortgage Investment Corporations (MICs) and other mortgage investment entities (MIEs), DV Capital provides access to individual real estate-secured private mortgage investments on a deal-by-deal basis.
Investing with DV Capital.
DV Capital brings decades of private mortgage origination, underwriting and lending experience to investors seeking access to real estate-secured private mortgage opportunities across Ontario. The firm’s principals have extensive experience assessing and funding private mortgages across diverse property types and borrower profiles, including founding, growing and ultimately selling a family-founded Mortgage Investment Corporation that became one of Ontario’s more prominent MICs.
That experience shapes DV Capital’s disciplined, asset-focused approach to private mortgage investing. Each opportunity is underwritten with consideration given to the value, integrity and marketability of the underlying real estate asset and overall risk profile.
Unlike pooled mortgage investment structures, DV Capital provides investors with access to individual mortgage opportunities on a deal-by-deal basis. Investors can assess each opportunity independently based on their preferred loan size, yield requirements and risk tolerance. Where an investor elects to proceed, the mortgage is funded directly by the investor or investing entity and registered in their name as mortgagee. DV Capital does not take custody of investor funds. Funds are advanced directly by the investor to the lawyer handling the mortgage funding and registration.
Who Can Invest in Private Mortgages in Ontario?
DV Capital primarily works with Private Mortgage Investors who qualify as members of a Designated Class of Lenders and Investors under Ontario Regulation 188/08 of the Mortgage Brokerages, Lenders and Administrators Act, 2006. For individual and entity investors, relevant Designated Classes include:
- A person or entity, other than an individual, with net assets of at least $5 million, as reflected in its most recently prepared financial statements, who provides written confirmation to the brokerage.
- An individual who, alone or together with his or her spouse, has net assets of at least $5 million and provides written confirmation to the brokerage.
- An individual who, alone or together with his or her spouse, beneficially owns financial assets with an aggregate realizable value exceeding $1 million, before taxes but net of related liabilities, and provides written confirmation to the brokerage.
- An individual whose net income before taxes exceeded $200,000 in each of the two most recent years, or whose combined net income with his or her spouse exceeded $300,000 in each of those years, who reasonably expects to exceed the same threshold in the current year and provides written confirmation to the brokerage.
Private Mortgage investors.
DV Capital works with qualified individuals and entities seeking access to real estate-secured residential and commercial private mortgage investments in Ontario.
Typical Private Mortgage Investor clients may include:
- High-Net-Worth Individuals
- Real Estate Investors
- Family Offices
- Holding Companies & Corporations
- Business Owners
- Professional Real Estate Corporations
- Co-Lenders & Mortgage Investment Entities
How to invest in private mortgages.
DV Capital provides qualified investors with multiple ways to fund individual private mortgage investments in Ontario, including personal funds, corporate capital and eligible self-directed registered accounts.
Cash Account: Investors may fund private mortgage investments using personal savings, corporate funds or holding-company capital. Where an investment proceeds, funds are advanced directly to the lawyer handling the mortgage funding and registration.
Self-Directed Registered Accounts: Eligible investors may also use certain self-directed registered plans, including RRSPs, TFSAs and RESPs, to invest in arm’s-length private mortgages through a qualified trustee or administrator such as Olympia Trust Company, subject to applicable plan and regulatory requirements.
Private Lending Due Diligence.
DV Capital conducts detailed due diligence on each private mortgage opportunity. Our underwriting process focuses on the quality of the underlying real estate, the proposed loan structure and the overall risk profile of the transaction.
Property Analysis: We assess the property securing the mortgage, including location, condition, marketability, valuation and equity. Third-party appraisals and supporting reports are obtained where appropriate.
Borrower Assessment: We review the borrower and guarantor profiles, including financial circumstances, credit history, mortgage requirements and the broader context of the transaction.
Loan Structure Review: We analyze the proposed loan amount, mortgage priority, loan-to-value, use of funds, repayment strategy and exit plan to determine whether the opportunity aligns with DV Capital’s lending criteria.
Legal & Closing Review: Mortgage transactions are completed through legal counsel appointed by the lender or investor, or through a lawyer familiar with DV Capital. Borrowers are separately represented by their own legal counsel.
Alternative to MICs: Invest in Individual Private Mortgages.
DV Capital offers investors access to individual residential and commercial private mortgage investments on a deal-by-deal basis, providing a direct alternative to pooled Mortgage Investment Entities (MIEs), including Mortgage Investment Corporations (MICs).
Some investors may prefer the ability to review and select individual mortgage opportunities, while others may use direct private mortgage investments to diversify alongside existing Mortgage Investment Corporation (MIC) or other Mortgage Investment Entity (MIE) investments.
Investors can review specific mortgage opportunities and decide which transactions align with their investment objectives, preferred loan size, yield requirements and risk tolerance.
Unlike a pooled Mortgage Investment Corporation (MIC) structure, individual mortgage investments are funded directly by the investor or investing entity and registered in their name as mortgagee. DV Capital does not take custody of investor funds.
Independent Private Mortgage Advisory for Investors.
DV Capital provides independent and unbiased private mortgage advisory services for investors seeking a second opinion on mortgage opportunities presented by other lenders, brokers or platforms.
Drawing on decades of private mortgage origination, underwriting and lending experience, DV Capital reviews the underlying real estate, proposed loan structure, mortgage priority, loan-to-value, borrower circumstances, repayment strategy and other material considerations before an investor commits capital.
This service is designed for investors who want an experienced, independent perspective on a private mortgage investment, whether they are new to private lending or actively reviewing opportunities from multiple sources.
Private Mortgage Investing FAQ.
DV Capital Corporation is licensed and regulated in Ontario under the Mortgage Brokerages, Lenders and Administrators Act, 2006. Our licensing can be independently verified through the Financial Services Regulatory Authority of Ontario (FSRA) public registry.
A private mortgage investment is a loan secured against real estate and funded by a private lender or investor rather than a traditional bank or institutional lender. In a direct private mortgage investment, the investor funds an individual mortgage and is registered on title as mortgagee.
Minimum investment amounts vary depending on the size and structure of the individual mortgage opportunity. DV Capital works with investors across a range of investment sizes and develops an investor profile to understand preferred loan amounts before presenting appropriate opportunities for consideration. Ideally, minimum investment amounts range from $100,000 to $500,000 and up.
Returns on private mortgage investments vary based on factors such as mortgage priority, loan-to-value, property type, location, loan size, borrower circumstances, term and overall transaction risk. DV Capital does not offer or advertise a fixed rate of return; the interest rate and economics of each mortgage are disclosed with the individual opportunity so investors can evaluate the potential return in relation to the associated risk. Market prevailing mortgage interest rates are also taken nto consideration.
Private mortgage terms vary by transaction, although many private mortgages are structured for relatively short periods compared with conventional mortgage financing. The term, maturity date, renewal provisions and applicable prepayment terms are disclosed for each individual mortgage opportunity before an investor decides whether to participate. Investors should keep in mind that there are liquidity risks and their investment may not be reedemed on or before the maturity date, depending on numerous circumstaneces.
Yes. DV Capital’s model is based on individual mortgage opportunities rather than a pooled fund. Investors can review a specific opportunity and determine whether they wish to participate based on the property, mortgage structure, loan size, yield, risk profile and their own investment objectives.
Yes. Subject to applicable eligibility and suitability requirements, private mortgage investments may be funded personally or through a corporation or holding company. Investors should obtain independent accounting and tax advice regarding the most appropriate structure for their circumstances.
Certain self-directed registered accounts can hold qualifying arm’s-length mortgage investments. CRA recognizes qualifying arm’s-length mortgages as permitted investments for certain registered plans, subject to applicable tax and prohibited-investment rules. Olympia Trust Company is one example of a provider offering self-directed accounts that can hold arm’s-length mortgages.
Yes. DV Capital may present both first- and second-mortgage investment opportunities depending on the transaction and the investor’s established preferences and risk profile. Mortgage priority is an important component of the underwriting and risk assessment for each opportunity. Note that DV Capital may also consider third mortgages behind 1st and 2nd mortgages and/ir lines of credit with bank lenders.
Fees and costs, if any, depend on the structure of the particular mortgage investment and are disclosed before an investor commits capital. Investors may incur their own legal, registered-account trustee, third-party administration or other professional costs depending on the transaction and how the investment is held.
Interest payment terms are established for each individual mortgage investment and disclosed before an investor commits capital. Payment frequency and structure may vary depending on the terms of the particular mortgage however most often borrowers mae monthoy interest payments; interest could aos be paritially or fully prepaif for the term.
Private mortgages may contain different prepayment provisions. Depending on the mortgage terms, a borrower may be permitted to repay the mortgage before maturity, which may result in the investor receiving their principal back earlier than originally anticipated. The applicable prepayment terms are reviewed as part of each individual mortgage opportunity.
Private mortgage investing involves risk, including the possibility of borrower default. The available remedies and potential recovery depend on factors including the mortgage documents, mortgage priority, property value, enforcement costs and prevailing market conditions. Investors should obtain independent legal advice concerning their rights and remedies in a particular mortgage investment. FSRA requires prescribed disclosure to private lenders/investors for applicable brokered mortgage transactions.
No. DV Capital does not take custody of investor funds. Funds are advanced directly by the investor to the lawyer handling the mortgage funding and registration.